6 10 AGRICULTURAL ECONOMICS 



The question arises here, What became of the butter ? Obviously, 

 one may think, it was consumed at higher prices, even if the consump- 

 tion was accompanied by complaints at the high cost of living. Here 

 again the existence of cold-storage houses served to cover the corre- 

 sponding change in demand. The truth of the matter is that all of the 

 butter was not consumed. To be sure, many consumers, unable to 

 go without butter, kept on paying higher prices; but people to whom 

 10 or 15 cents on a pound of butter means a great deal used less of 

 it, at the same time accustoming their digestion to butterine and oleo- 

 margarine. What then happened to the surplus supply of butter? 

 The answer to this at once suggests the border line between the good 

 and evil involved in the cold storage. The natural and the customary 

 period for keeping butter in cold storage extends from July to the end 

 of March. The output between March and the end of June is usually 

 equal to the demand at customary prices. People then should have 

 fresh butter during this period, and correspondingly cold storages 

 should remain empty up to the end of June. Beginning with 1904 

 these storing periods began to move forward at the end and backward 

 at the beginning of the period. In 1909 there was plenty of storage 

 butter at the end of April and new storing began exceptionally early in 

 June; speculation kept the price for the fresh butter high enough with 

 a view to the new storing season, so a smooth surface was kept on the 

 butter market. It is obvious that a crash had to come, since carrying 

 over butter from one season to another, even if possible from the 

 point of view of preserving the butter in good shape, is a very risky 

 enterprise, practicable only when the approach of a famine is certain. 

 But such a conjuncture never actually takes place. Moreover, early 

 butter, coming in during May and June, cannot stand storage. Thus 

 the supply in one year was consumed at the expense of storing the 

 supply of the coming year and so on until if it had not been for the 

 crisis we should soon have reached the impossible situation of keep- 

 ing a constantly increasing supply with correspondingly decreasing 

 demands. Many dealers expected the crisis early in 1910 and lost 

 heavily by being forced to pay high prices to speculators, who con- 

 tinued to be optimistic. 



Other forces, too, were active in undermining the upward price 

 movement. First come the substitutes. Butter was simply driven 

 out from many markets, butterine took its place. Next in importance 

 comes the question of importing butter from abroad. Maine, Ver- 



